Morgan City utility rates on the rise

Morgan City utility customers – residential and commercial – have probably noticed their utility bills are higher this month. Beginning Jan. 1, a yearlong monthly surcharge for electricity went into effect.

The Morgan City Council imposed the surcharge at the suggestion of outgoing Mayor Tim Matte. The monies raised will help pay to relocate the city’s old power transformer and install a utility breaker. The move is to serve as a second line of defense in the event of another mishap at the Joe Cefalu Steam Plant.

On June 26, 2012, the city’s 100-megawatt transformer overheated and caught fire at the plant, leaving 6,300 utility customers in darkness for 24 hours.

In the following weeks, officials grappled with fixes to the problem, which resulted in two weeks’ worth of rolling blackouts.

Power was eventually restored using a 45-megawatt transformer.

The 100-megawatt unit sustained $1.1 million in damage from the June 26 incident. The unit was insured and damaged were covered; however, the city did have to pay a $50,000 deductible.

With a new 100-megawatt transformer set to arrive in May, the city intends to move the 45-megawatt unit near its sewage plant. A breaker will also be installed of the new 100-megawatt transformer, which will allow the city to switch its utility service back to the smaller transformer in the event of a problem.

Matte said the surcharge will raised about $385,000 over the next year through the regular fuel adjustment charge of .225 cents per kilowatt hour.

“Our average resident uses approximately 1,400 KWHs per month. This will raise their bill by $3.15 per month. Our fuel adjustments have been at very low rates compared to the past 10 years.”

However, the surcharge isn’t sitting well with Morgan City’s small business owners.

Margie LeBlanc, who with her family owns Delta Printing, suggested the charge be listed as a separate item on her utility bill.

“The city is adding the surcharge to the fuel adjustment cost, which in itself varies month to month. How am I going to know when I’ve finished paying for my share of this plan?” she asked.

Dalcour Cleaners owner Carol Jean argues “the city should have taken better care of what they had.”

“It doesn’t seem like there is too much maintenance going on over there, especially with those old steam generators … so where was the concern for protection then? They should have taken better care of what they had.”

She is resolved to the temporary surcharge in the meantime. “As far as the surcharge, well I guess we really have no choice.”

Morgan City first began providing power to its residents in the 1940s, generating its own power by using diesel and steam generators.

In the 1980s, the city became a member of the Louisiana Energy and Power Authority, in order to provide service at the lowest possible cost.

Lorrie Braus, who recently retired as Morgan City’s chief administrative officer, explained that the city blends power generated from the steam plant with that provided by LEPA through a transformer in order to provide “a savings to residents.”

But Jackie Price said she still doesn’t understand the reason for the surcharge cost. Price operates the Frame Shop of Morgan City with her husband Frank and their daughter Deborah, the shop’s owner.

“I still don’t know any particulars regarding the reason for the disaster, who owns the building known as the Joseph Cefalu Power Plant, who owns the equipment inside the building, who is responsible for maintaining the equipment 365 days a year, or who owns the transformers in question, both the destroyed transformer and the new transformer on order.

“With my business or homeowner’s insurance, my policy would cover a sustainable loss, including the cost of the equipment involved and also the removal and reinstallation of new equipment and ancillary needs. Did we not, or did LEPA not, have this type of coverage?

“In plain English, the city needs to explain and detail in writing the total expenses projected in the ordinance,” she said.

Frank Price said he believes the surcharge “Is a hidden tax, just like the fuel adjustment costs.”

Like Delta Printing’s LeBlanc, Deborah Price said she also believes the item needs to be listed as a separate charge on her utility bill.

“Is it necessary that this charge be passed down to us, the consumer? Also, why should I have to pay the same surcharge on my home, as I do my business?”

Morgan City Councilman Ron Bias agreed the charge should be listed as a separate item on the utility bills.

“But as far as it being necessary? Yes it is … for protection, security and sustainability,” he said.